Shake Shack forming eerie IPO pattern: Chart

A Shake Shack restaurant in New York.
Andrew Kelly | Reuters

Shake Shack slings burgers. GoPro sells cameras.

While the two couldn't be more different in terms of business models, they are both barometers of investors' appetite for hot, recent IPOs. That's what makes this Shake Shack chart from Bespoke Investment Group so concerning.

The following is a preview of a CNBC Pro story featuring Bespoke Investment Group's Paul Hickey, an expert in analyzing historical data to make future trades. Sign up for a live Pro Talks event with Hickey taking your questions Tuesday at 2 p.m. ET by clicking here.

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Source: Bespoke Investment Group

From the Bespoke note to clients:

In Shake Shack's "short life as a public company [it] has had a strong resemblance to shares of Go-Pro (GPRO). The chart below compares the performance of both stocks since their IPOs. As shown, both stocks saw an initial spike of nearly 100% on their IPOs and then consolidated those gains for about six weeks before taking off again. For GPRO, the stock peaked at a level of 291% above its IPO price on the stock's 72nd day as a public company. Shares of SHAK have only been trading for 69 trading days, but the stock's maximum gain hit as high as 273% just three days ago, but after a pullback this week the stock is up just 221% from its IPO price."

Hickey is telling clients to sell the burger stock and also sold the shares in the firm's model portfolio, which is up 12 percent this year.

What also has the research analyst and investor concerned is the fact that it's virtually impossible to bet against the shares.

"Since there are no options traded on the stock, the only way to bet against it is to short the stock, and to do that you need to be able to borrow shares. The problem, is that shares are incredibly hard to borrow right now as the float is small and concentrated. Currently, to borrow shares you need to pay a borrow rate of 30%, which is an absurdly high rate."

As we've learned in the past with bans on short selling in China and with bank stocks during our own financial crisis it is not a recipe for an efficient market. The stocks can be artificially inflated and then be in for a big drop when ways to bet against the shares are restored.

In the case of ticker "SHAK," options trading begins this summer. It could get hot behind the grill.